Harvey Organ, Wednesday, August 10, 2011

 Harvey Organ, Wednesday, August 10, 2011

Gold hits Record $1796 in access trading/ Dow plummets by 520/the shorts in silver and gold in serious trouble:

 

 

 

CME Hikes Gold Margins By 22% And Gold Drops by....0.4%, Resumes Climb

Just after hitting a new all time high of above $1815 in spot gold, the CME immediately sent out a notice to members advising that gold margins for Tier 1 members were increasing by 22% for both initial and maintenance positions, from $4,500 to $5,500. Unfortunately for the CME, this predetermined move was telegraphed to the market weeks ago, and with rumor 57 out of 22 finally turning out correct, this latest move only managed to push gold down modestly, and at last check was once again trading above $1,800. Just like all central bank interventions, which now have a half life between 1 hour and 4 days max, so this latest exchange attempt to subdue prices will fail spectacularly. Naturally, just like in the case of silver, this will merely embolden the CME to proceed with hike after hike, which in turn will kill speculative elements while merely reinforcing the strong hands. End result: in one month gold will be above $2,000 with almost 100% certainty.

"The Punch Line" - All The Ad Hoc Data That's Fit To Print... And Then Some

Abe Gulkowitz has released the latest edition of his always delightful and informative newsletter (for lack of a better word) "The Punch Line": the best aggregation of ad hoc charts, factoids, and data points available anywhere. While by now even Deutsche Bank realizes that the US economy has entered a recession, here is the blow by blow of how we got there, where we may be headed next and 1001 other facts about the US economy and the world that you probably did not know...

If you find useful information here, please consider making a small donation, to help cover cost of running this blog. Without your support I will be forced to shut down this blog soon.

Thank You

I'm PayPal Verified

In The News Today

August 10, 2011, at 1:22 pm
by Jim Sinclair 

Jim Sinclair’s Commentary

Economically, the disaster took the form of a weak compromise to raise the debt ceiling in the US. It will not go away until faced, which is not a talent of our leadership.

"Sooner or later comes a crisis in our affairs, and how we meet it determines our future happiness and success. Since the beginning of time, every form of life has been called upon to meet such crisis.” –Robert Collier (1885-1950) 



Jim Sinclair’s Commentary

Check out the latest commentary from Ron Paul.

Ron Paul "This Is Probably A Bigger Problem Than The World Has EVER Faced Before!"

Jim Sinclair’s Commentary

French banks, Greek banks, British banks or US banks, take your pick because it is all the same. Some are camouflaged by FASB, others by liquidity, but at heart, all are the same

Wall Street slumps on worries over French banks By Edward Krudy | Reuters – 29 mins ago
NEW YORK (Reuters) – Wall Street stocks fell sharply on Wednesday on fears over possible trouble in the French banking sector that has large exposure to shaky peripheral European debt.
U.S. financial stocks led the decline as the KBW bank index slid 6.2 percent. Large financial institutions fell sharply, with Bank of America Corp down 12.2 percent to $6.93.
French banks were hit hard in Paris trading. Societe General, where U.S. traders have focused their attention, fell 16 percent. BNP Paribas fell 13.2 percent.
"France owns $350 billion worth of Italy’s debt on their banks’ books," Dave Rovelli managing director of U.S. equity trading at Canaccord Adams, who said fears of a failure in the sector were hitting U.S. markets.
The Dow Jones industrial average dropped 342.96 points, or 3.05 percent, to 10,896.81. The Standard & Poor’s 500 Index fell 33.66 points, or 2.87 percent, to 1,138.87. The Nasdaq Composite Index shed 72.56 points, or 2.92 percent, to 2,409.96.
More…




Jim Sinclair’s Commentary

Back or front door, QE to infinity is inescapable.

Fed May Strengthen Stimulus Pledge on Renewed Recession Concern By Jeannine Aversa and Scott Lanman – Aug 9, 2011 5:50 AM MT
Federal Reserve officials may strengthen their commitment to record monetary stimulus as soon as today after a faltering economic recovery and a U.S. credit- rating cut provoked a rout in global stocks.
By a 52 percent to 48 percent margin, respondents in a Bloomberg News survey said the Fed would ease policy this year through monetary tools or statement language. If the central bank acts, 59 percent said it would communicate that the federal funds rate, balance sheet or both will remain especially stimulative for a longer period or more specific amount of time.
Chairman Ben S. Bernanke and his colleagues are weighing the use of more untested policy tools after two rounds of bond buying totaling $2.3 trillion failed to spur sufficient economic growth and reduce unemployment below 9 percent. The Federal Open Market Committee holds its regular meeting today in Washington following the worst day for U.S. stocks since December 2008.
“The odds of more dramatic action are higher,” said Vincent Reinhart, a former chief monetary policy strategist at the Fed. “However, they might not want to be seen as responding so directly to equity prices,” Reinhart said, adding that policy makers may wait to signal a new round of bond purchases until Bernanke gives a speech on Aug. 26 at a Fed conference at Jackson Hole, Wyoming. Reinhart is a resident scholar at the American Enterprise Institute in Washington.
More…



Jim Sinclair’s Commentary

Celebrated by financial TV as a spontaneous outbreak of democracy, this will turn into the mess of all time.

Sharia execution urged for Mubarak Marie Colvin
August 08, 2011 12:00AM
THE spokesman for Egypt’s Muslim Brotherhood, which portrays itself as a moderate Islamic movement, has called for execution and hand amputations if the Mubaraks are found guilty of murder and corruption.
"If a man has stolen millions of the state’s money, the penalty is that I must cut off his hand," said Mahmoud Ghuzlan, a professor of biochemistry at Zagazig University. "There is no argument. These are God’s words."
The group, banned for half a century, was legalised only after the fall of former president Hosni Mubarak.
Professor Ghuzlan said the penalty of amputation, mandated under sharia law, should apply to his sons Gamal — the younger, who was being groomed as heir — and Alaa, a businessman.
In a scene that transfixed the nation last week, the two brothers, both charged with profiteering, stood in court as their father lay on a trolley next to them.
The senior Mubarak, charged with responsibility for the deaths of about 850 protesters killed by his security forces, periodically craned his neck forward to peer from the defendants’ cage out at the court.
Professor Ghuzlan had no sympathy. Mr Mubarak should be hanged if convicted, although "beheading by the sword" would be more traditional, he said.
More…

Jim’s Mailbox

August 10, 2011, at 1:14 pm
by Jim Sinclair 

The Battle Begins  
CIGA Eric

Follow the Angels. Sorry Angels fans, we’re not talking baseball here. Jim knows what an exponential move "feels" like. 




Emails continue to convey concern over frothiness. Perhaps, but don’t let personal opinion override the message of the market. Those with wolf-like instincts are beginning to sense wounded prey.
Gold, London P.M. Fixed (Gold) and Z Scores of Secular Trend 




More…



Goldman says QE3 likely after dovish Fed statement 

CIGA Eric

QE won’t do much for job creation, but it will kick the can down the road a little further. This policy conundrum of “damned if you do or damned if you don’t” will become even more obvious as we approach 2016.
Headline: Goldman says QE3 likely after dovish Fed statement
Goldman Sachs said on Wednesday a third round of quantitative easing from the Federal Reserve is likely after the U.S. Federal Reserve promised to keep rates at extraordinarily low levels for at least two more years.
"We now see a greater-than-even chance that the FOMC will resume quantitative easing later this year or in early 2012. We have changed our call because today’s statement suggests that the committee’s reaction function to incoming economic news is more dovish than we had previously thought," Jan Hatzius, chief economist at the firm, said in a note.
The explicit commitment to keep policy rates low through mid-2013 and a bias to easing policy further were more aggressive than expected and resulted in Goldman penciling in QE3 after the previous $600 billion bond-purchase program ended in June.

More…

Don’t Bet Against Gold or Silver

August 10, 2011, at 1:11 pm
by Greg Hunter in the category USAWatchdog.com |  Print This Post |  Email This Post

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

You have to respect the power of the Federal Reserve when just a statement can turn the entire stock market around in a day.  Yesterday, the Fed admitted the economy was not good and in a statement said, “. . .downside risks to the economic outlook have increased.”  Because the economy is tanking, the Fed promised to keep a key interest rate at near 0% for “. . . at least through mid-2013.”  The Fed is essentially handing out free money at negative interest rates for 2 years.  The Fed also seemed to signal that a third round of quantitative easing (QE3 or money printing) was being considered.  The Fed statement went on to say, “The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability.  It will continue to assess the economic outlook in light of incoming information and is prepared to employ these tools as appropriate.”  (Click here to read the complete Fed statement, released 8/9/11.)   With interest rates near 0%, the only “tool” left with any torquing power for the economy is money printing.  The buck will be burned.
The stock market loved the announcement, but anyone holding dollars was left with a sinking feeling.  Bloomberg reported yesterday, “The dollar tumbled the most in at least 40 years against the Swiss franc after the Federal Reserve pledged to keep its key interest rate at a record low . . . The greenback declined versus the majority of its most- traded peers as the Fed said growth was “considerably slower” than it expected and it’s prepared to use a range of policy tools to boost the economy.”  (Click here for the complete Bloomberg story.)  
The gold market has been hitting one new all-time high after another because of past, present and future money printing.  I think big money is panicking into the gold market for safety.  Sure, the Treasury market is the biggest and most liquid on earth, but how safe is it when the U.S can print trillions of dollars at will to pay its bills?

More…

Market Commentary From Monty Guild